Central bank of India is one of 18 Public Sector banks in India to get recapitalisation finance from the government over the next 24 months. The infusion of fund will improve the financial health of the banks as their capital adequacy ratio (CAR) will be raised more than desired level of 12 percent. The increase in CAR of the banks will also enable them to lend more money. The CAR of Central Bank of India was less than 12 percent as on 30 June 2006.

The wholly-owned public sector bank, based in Mumbai, will convert an amount of Rs. 800 crore out of its Rs. 1,124.14-crore total equity capital into perpetual non-cumulative preference shares.The preference shares would carry an annual floating coupon rate of eight per cent, which would be benchmarked to 100 basis points above the repo rate. It will shore up the balance-sheet of the bank and enable it to raise capital from the markets.

According to an official statement, the equity capital restructuring would lead to an improvement in the bank's credit rating as also facilitate the adoption of Basel II norms.

It was established on 21 December 1911 by Sir Sorabji Pochkhanawala and claims to have been the first commercial Indian bank completely owned and managed by Indians.

In 1923, it acquired the Tata Industrial Bank in the wake of the failure of the Alliance Bank of Simla.

In 1969, the Indian Government nationalized the bank on 19 July, together with 13 others.